FORM
10-K
|
(Mark
One)
|
|||||
þ
|
Annual
Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
|
||||
For
the fiscal year ended December 31, 2007
|
|||||
or
|
|||||
¨
|
Transition
Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
|
||||
For
the transition period from ___________to ___________
|
|||||
_____________________________
Commission
file number 1-6461
_____________________________
|
|||||
General
Electric Capital Corporation
(Exact
name of registrant as specified in its
charter)
|
Delaware
|
13-1500700
|
|||
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification No.)
|
|||
3135
Easton Turnpike, Fairfield, Connecticut
|
06828
|
203/373-2211
|
||
(Address
of principal executive offices)
|
(Zip
Code)
|
(Registrant’s
telephone number,
including
area code)
|
||
Securities
Registered Pursuant to Section 12(b) of the Act:
|
||||
Title
of each class
|
Name
of each exchange
on
which registered
|
|||
6.625%
Public Income Notes Due June 28, 2032
|
New
York Stock Exchange
|
|||
6.10%
Public Income Notes Due November 15, 2032
|
New
York Stock Exchange
|
|||
5.875%
Notes Due February 18, 2033
|
New
York Stock Exchange
|
|||
Step-Up
Public Income Notes Due January 28, 2035
|
New
York Stock Exchange
|
|||
6.45%
Notes Due June 15, 2046
|
New
York Stock Exchange
|
|||
6.00%
Public Income Notes Due April 24, 2047
|
New
York Stock Exchange
|
Securities
Registered Pursuant to Section 12(g) of the Act:
|
||
Title of each class
|
||
None
|
Large
accelerated filer ¨
|
Accelerated
filer ¨
|
Non-accelerated
filer þ
|
Smaller
reporting company ¨
|
TABLE
OF CONTENTS
|
||
Page
|
||
PART
I
|
||
Business
|
3
|
|
Risk
Factors
|
7
|
|
Unresolved
Staff Comments
|
9
|
|
Properties
|
9
|
|
Legal
Proceedings
|
9
|
|
Submission
of Matters to a Vote of Security Holders
|
11
|
|
PART
II
|
||
Market
for Registrant’s Common Equity, Related Stockholder Matters
and
|
||
Issuer Purchases of Equity
Securities
|
12
|
|
Selected
Financial Data
|
12
|
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
12
|
|
Quantitative
and Qualitative Disclosures About Market Risk
|
37
|
|
Financial
Statements and Supplementary Data
|
38
|
|
Changes
in and Disagreements With Accountants on Accounting and Financial
Disclosure
|
82
|
|
Controls
and Procedures
|
82
|
|
Other
Information
|
83
|
|
PART
III
|
||
Directors,
Executive Officers and Corporate Governance
|
83
|
|
Executive
Compensation
|
83
|
|
Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
|
83
|
|
Certain
Relationships and Related Transactions, and Director
Independence
|
83
|
|
Principal
Accounting Fees and Services
|
83
|
|
PART
IV
|
||
Exhibits,
Financial Statement Schedules
|
84
|
|
Signatures
|
·
|
Strengthening
its expertise and technical controllership resources in corporate
accounting and its internal audit staff devoted to complex accounting
matters;
|
·
|
Implementing
improved procedures for its corporate accounting and internal audit staff
for review of accounting for unusual
transactions;
|
·
|
Enhancing
its operational controllership resources, structure and processes to
oversee GE businesses to better ensure controllership policies are fully
executed;
|
·
|
Enhancing
and clarifying its global accounting policies and procedures for revenue
recognition and its related training programs and
communication;
|
·
|
Improving
the processes and procedures around documentation of critical accounting
areas and judgments and accounting changes, and enhancing communication of
these matters to senior management and GE’s audit
committee;
|
·
|
Continuing
to stress leadership communication about integrity, accuracy and
transparency; and
|
·
|
Evaluating
responsibility, where errors have occurred, with respect to the employees
involved in the transactions related to such errors and making appropriate
personnel determinations based on such
evaluations.
|
(In
millions)
|
2007
|
2006
|
2005
|
2004
|
2003
|
||||||||||
Revenues
|
$
|
67,249
|
$
|
57,757
|
$
|
51,379
|
$
|
47,859
|
$
|
40,404
|
|||||
Earnings
from continuing operations
|
|||||||||||||||
before accounting
changes
|
11,957
|
10,131
|
8,503
|
7,615
|
6,004
|
||||||||||
Earnings
(loss) from discontinued operations,
|
|||||||||||||||
net of taxes
|
(2,142
|
)
|
255
|
1,423
|
975
|
1,780
|
|||||||||
Earnings
before accounting changes
|
9,815
|
10,386
|
9,926
|
8,590
|
7,784
|
||||||||||
Net
earnings
|
9,815
|
10,386
|
9,926
|
8,590
|
7,445
|
||||||||||
Shareowner’s
equity
|
61,230
|
56,585
|
50,190
|
54,038
|
46,722
|
||||||||||
Short-term
borrowings
|
186,770
|
168,894
|
149,671
|
147,281
|
146,850
|
||||||||||
Long-term
borrowings
|
309,233
|
256,807
|
206,191
|
201,373
|
162,524
|
||||||||||
Return
on average shareowner’s equity(a)
|
20.4
|
%
|
19.3
|
%
|
17.4
|
%
|
16.8
|
%
|
14.6
|
%
|
|||||
Ratio
of earnings to fixed charges
|
1.56
|
1.63
|
1.67
|
1.83
|
1.73
|
||||||||||
Ratio
of debt to equity
|
8.10:1
|
7.52:1
|
7.09:1
|
6.45:1
|
6.62:1
|
||||||||||
Financing
receivables – net
|
$
|
380,004
|
$
|
323,943
|
$
|
278,614
|
$
|
272,687
|
$
|
238,958
|
|||||
Total
assets
|
620,386
|
543,665
|
475,259
|
566,984
|
506,778
|
||||||||||
(a)
|
Represents
earnings from continuing operations before accounting changes divided by
average total shareowner’s equity, excluding effects of discontinued
operations (on an annual basis, calculated using a five-point average).
Average total shareowner’s equity, excluding effects of discontinued
operations, as of the end of each of the years in the five-year period
ended December 31, 2007, is described in the Supplemental Information
section.
|
•
|
Liquidity
risk is the risk of being unable to accommodate liability maturities, fund
asset growth and meet contractual obligations through access to funding at
reasonable market rates. Additional information about our liquidity and
how we manage this risk can be found in the Financial Resources and
Liquidity section and in notes 11 and
18.
|
•
|
Credit
risk is the risk of financial loss arising from a customer or counterparty
failure to meet its contractual obligations. We face credit risk in our
investing, lending and leasing activities (see the Financial Resources and
Liquidity and Critical Accounting Estimates sections and notes 1, 5, 6, 7
and 20) and derivative financial instruments activities (see note
18).
|
•
|
Market
risk is the potential loss in value of investment and other asset and
liability portfolios, including financial instruments and residual values
of leased assets. This risk is caused by changes in market variables, such
as interest and currency exchange rates and equity and commodity prices.
We are exposed to market risk in the normal course of our business
operations as a result of our ongoing investing and funding activities.
Additional information can be found in the Financial Resources and
Liquidity section and in notes 5, 6, 8 and
18.
|
(In
millions)
|
2007
|
2006
|
2005
|
||||||
Revenues
|
|||||||||
GE
Commercial Finance(a)
|
$
|
34,288
|
$
|
30,853
|
$
|
27,273
|
|||
GE
Money
|
25,019
|
19,783
|
17,072
|
||||||
GE
Infrastructure
|
57,925
|
46,965
|
41,695
|
||||||
Total segment
revenues
|
117,232
|
97,601
|
86,040
|
||||||
GECC
corporate items and eliminations
|
1,661
|
1,929
|
2,608
|
||||||
Total
revenues
|
118,893
|
99,530
|
88,648
|
||||||
Less
portion of GE revenues not included in GECC
|
(51,644
|
)
|
(41,773
|
)
|
(37,269
|
)
|
|||
Total
revenues in GECC
|
$
|
67,249
|
$
|
57,757
|
$
|
51,379
|
|||
Segment
profit
|
|||||||||
GE
Commercial Finance(a)
|
$
|
6,039
|
$
|
5,297
|
$
|
4,487
|
|||
GE
Money
|
4,280
|
3,267
|
2,527
|
||||||
GE
Infrastructure
|
10,810
|
8,848
|
7,711
|
||||||
Total segment
profit
|
21,129
|
17,412
|
14,725
|
||||||
GECC
corporate items and eliminations(b)
|
192
|
55
|
305
|
||||||
Less
portion of GE segment profit not included in GECC
|
(9,364
|
)
|
(7,336
|
)
|
(6,527
|
)
|
|||
Earnings
in GECC from continuing operations
|
11,957
|
10,131
|
8,503
|
||||||
Earnings
(loss) in GECC from discontinued operations, net of taxes
|
(2,142
|
)
|
255
|
1,423
|
|||||
Total
net earnings in GECC
|
$
|
9,815
|
$
|
10,386
|
$
|
9,926
|
|||
(a)
|
During
the fourth quarter of 2007, we transferred the Equipment Services business
from the GE Industrial segment to the GE Commercial Finance segment, where
a portion of the business is reported in Capital
Solutions.
|
|
(b)
|
Included
restructuring and other charges for 2007 of $0.4 billion related to GE
Commercial Finance ($0.3 billion), primarily business exits and GE Money
($0.1 billion), primarily portfolio exits.
|
See
accompanying notes to consolidated financial statements.
|
(In
millions)
|
2007
|
2006
|
2005
|
||||||
Revenues
|
$
|
34,288
|
$
|
30,853
|
$
|
27,273
|
|||
Less
portion of GE Commercial Finance not included in GECC
|
(954
|
)
|
(810
|
)
|
(632
|
)
|
|||
Total revenues in
GECC
|
$
|
33,334
|
$
|
30,043
|
$
|
26,641
|
|||
Segment
profit
|
$
|
6,039
|
$
|
5,297
|
$
|
4,487
|
|||
Less
portion of GE Commercial Finance not included in GECC
|
(436
|
)
|
(293
|
)
|
(301
|
)
|
|||
Total segment profit in
GECC
|
$
|
5,603
|
$
|
5,004
|
$
|
4,186
|
|||
December
31 (In
millions)
|
2007
|
2006
|
|||||||
Total
assets
|
$
|
310,412
|
$
|
252,901
|
|||||
Less
portion of GE Commercial Finance not included in GECC
|
(3,453
|
)
|
3,689
|
||||||
Total assets in
GECC
|
$
|
306,959
|
$
|
256,590
|
|||||
(In
millions)
|
2007
|
2006
|
2005
|
||||||
Revenues
in GE
|
|||||||||
Capital
Solutions
|
$
|
14,354
|
$
|
14,169
|
$
|
13,162
|
|||
Real Estate
|
7,021
|
5,020
|
3,492
|
||||||
Segment
profit in GE
|
|||||||||
Capital
Solutions
|
$
|
1,889
|
$
|
1,789
|
$
|
1,522
|
|||
Real Estate
|
2,285
|
1,841
|
1,282
|
||||||
December
31 (In
millions)
|
2007
|
2006
|
|||||||
Assets
in GE
|
|||||||||
Capital
Solutions
|
$
|
122,527
|
$
|
100,882
|
|||||
Real Estate
|
79,285
|
53,786
|
(In
millions)
|
2007
|
2006
|
2005
|
||||||
Revenues
|
$
|
25,019
|
$
|
19,783
|
$
|
17,072
|
|||
Less
portion of GE Money not included in GECC
|
–
|
–
|
–
|
||||||
Total revenues in
GECC
|
$
|
25,019
|
$
|
19,783
|
$
|
17,072
|
|||
Segment
profit
|
$
|
4,280
|
$
|
3,267
|
$
|
2,527
|
|||
Less
portion of GE Money not included in GECC
|
(47
|
)
|
(54
|
)
|
3
|
||||
Total segment profit in
GECC
|
$
|
4,233
|
$
|
3,213
|
$
|
2,530
|
|||
December
31 (In
millions)
|
2007
|
2006
|
|||||||
Total
assets
|
$
|
210,952
|
$
|
179,284
|
|||||
Less
portion of GE Money not included in GECC
|
100
|
955
|
|||||||
Total assets in
GECC
|
$
|
211,052
|
$
|
180,239
|
(In
millions)
|
2007
|
2006
|
2005
|
||||||
Revenues
|
$
|
57,925
|
$
|
46,965
|
$
|
41,695
|
|||
Less
portion of GE Infrastructure not included in GECC
|
(50,690
|
)
|
(40,963
|
)
|
(36,637
|
)
|
|||
Total revenues in
GECC
|
$
|
7,235
|
$
|
6,002
|
$
|
5,058
|
|||
Segment
profit
|
$
|
10,810
|
$
|
8,848
|
$
|
7,711
|
|||
Less
portion of GE Infrastructure not included in GECC
|
(8,881
|
)
|
(6,989
|
)
|
(6,229
|
)
|
|||
Total segment profit in
GECC
|
$
|
1,929
|
$
|
1,859
|
$
|
1,482
|
|||
Revenues
in GE
|
|||||||||
Aviation
|
$
|
16,819
|
$
|
13,017
|
$
|
11,826
|
|||
Aviation Financial
Services
|
4,605
|
4,177
|
3,504
|
||||||
Energy
|
21,825
|
18,793
|
16,501
|
||||||
Energy Financial
Services
|
2,405
|
1,664
|
1,349
|
||||||
Oil & Gas
|
6,849
|
4,340
|
3,598
|
||||||
Transportation
|
4,523
|
4,159
|
3,577
|
||||||
Segment
profit in GE
|
|||||||||
Aviation
|
$
|
3,222
|
$
|
2,802
|
$
|
2,525
|
|||
Aviation Financial
Services
|
1,155
|
1,108
|
764
|
||||||
Energy
|
3,824
|
2,906
|
2,662
|
||||||
Energy Financial
Services
|
724
|
695
|
646
|
||||||
Oil & Gas
|
860
|
548
|
411
|
||||||
Transportation
|
936
|
774
|
524
|
(In
millions)
|
2007
|
2006
|
2005
|
||||||
Earnings
(loss) in GECC from discontinued operations, net of taxes
|
$
|
(2,142
|
)
|
$
|
255
|
$
|
1,423
|
·
|
During
2007, we separately reported the assets and liabilities of Lake and WMC as
discontinued operations for all periods presented. As of December 31,
2007, we have completed the sale of WMC, reducing assets and liabilities
of discontinued operations by $4.5 billion and $0.1 billion,
respectively.
|
·
|
During
2007, we completed the acquisitions of Sanyo Electric Credit Co., Ltd.;
DISKO and ASL, the leasing businesses of KG Allgemeine Leasing GmbH &
Co.; Trustreet Properties, Inc.; Dundee REIT; Crow Holdings; and a
controlling interest in Regency Energy Partners
LP.
|
·
|
The
U.S. dollar was weaker at December 31, 2007, than it was at December 31,
2006, increasing the translated levels of our non-U.S. dollar assets and
liabilities. Overall, on average, the U.S. dollar in 2007 was weaker than
during the comparable 2006 period, resulting in increasing the translated
levels of our operations as noted in the preceding Operations
section.
|
December
31
|
2007
|
2006
|
2005
|
||||||
GE
Commercial Finance
|
1.21
|
%
|
1.22
|
%
|
1.31
|
%
|
|||
GE
Money
|
5.36
|
5.21
|
5.34
|
||||||
U.S.
|
5.52
|
4.93
|
5.00
|
||||||
Non-U.S.
|
5.30
|
5.32
|
5.47
|
•
|
It
is our policy to minimize exposure to interest rate changes. We fund our
financial investments using debt or a combination of debt and hedging
instruments so that the interest rates and terms of our borrowings match
the expected yields and terms on our assets. To test the effectiveness of
our positions, we assumed that, on January 1, 2008, interest rates
increased by 100 basis points across the yield curve (a “parallel shift”
in that curve) and further assumed that the increase remained in place for
2008. We estimated, based on the year-end 2007 portfolio and holding
everything else constant, that our 2008 net earnings would decline by $0.1
billion.
|
•
|
It
is our policy to minimize currency exposures and to conduct operations
either within functional currencies or using the protection of hedge
strategies. We analyzed year-end 2007 consolidated currency exposures,
including derivatives designated and effective as hedges, to identify
assets and liabilities denominated in other than their relevant functional
currencies. For such assets and liabilities, we then evaluated the effects
of a 10% shift in exchange rates between those currencies and the U.S.
dollar. This analysis indicated that there would be an inconsequential
effect on 2008 earnings of such a shift in exchange
rates.
|
Payments
due by period
|
|||||||||||||||||||||
(In
billions)
|
Total
|
2008
|
2009-2010
|
2011-2012
|
2013
and
thereafter
|
||||||||||||||||
Borrowings
(note 11)
|
$
|
496.0
|
$
|
186.8
|
$
|
118.1
|
$
|
71.7
|
$
|
119.4
|
|||||||||||
Interest
on borrowings
|
145.0
|
22.0
|
32.0
|
19.0
|
72.0
|
||||||||||||||||
Operating
lease obligations (note 4)
|
3.7
|
0.8
|
1.2
|
0.7
|
1.0
|
||||||||||||||||
Purchase
obligations(a)(b)
|
39.0
|
23.0
|
9.0
|
7.0
|
−
|
||||||||||||||||
Insurance
liabilities (note
12)(c)
|
12.0
|
1.0
|
4.0
|
1.0
|
6.0
|
||||||||||||||||
Other
liabilities(d)
|
21.0
|
18.0
|
1.0
|
–
|
2.0
|
||||||||||||||||
Contractual
obligations of
|
|||||||||||||||||||||
discontinued operations(e)
|
1.0
|
1.0
|
–
|
–
|
–
|
||||||||||||||||
(a)
|
Included
all take-or-pay arrangements, capital expenditures, contractual
commitments to purchase equipment that will be leased to others, software
acquisition/license commitments and any contractually required cash
payments for acquisitions.
|
|
(b)
|
Excluded
funding commitments entered into in the ordinary course of business.
Further information on these commitments and other guarantees is provided
in note 20.
|
|
(c)
|
Included
guaranteed investment contracts.
|
|
(d)
|
Included
an estimate of future expected funding requirements related to our pension
benefit plans. Because their future cash outflows are uncertain, the
following non-current liabilities are excluded from the table above:
deferred taxes, derivatives, deferred revenue and other sundry items. See
notes 13 and 18 for further information on certain of these
items.
|
|
(e)
|
Included
payments for other liabilities.
|
•
|
Earnings
and profitability, revenue growth, the breadth and diversity of sources of
income and return on assets
|
•
|
Asset
quality, including delinquency and write-off ratios and reserve
coverage
|
•
|
Funding
and liquidity, including cash generated from operating activities,
leverage ratios such as debt-to-capital, market access, back-up liquidity
from banks and other sources, composition of total debt and interest
coverage
|
•
|
Capital
adequacy, including required capital and tangible leverage
ratios
|
•
|
Franchise
strength, including competitive advantage and market conditions and
position
|
•
|
Strength
of management, including experience, corporate governance and strategic
thinking
|
•
|
Financial
reporting quality, including clarity, completeness and transparency of all
financial performance
communications
|
•
|
Swap,
forward and option contracts are required to be executed under standard
master-netting agreements containing mutual downgrade provisions that
provide the ability of the counterparty to require assignment or
termination if the long-term credit rating of GECC were to fall below
A-/A3. Our related obligation, net of master-netting agreements would have
been $2.8 billion at December 31,
2007.
|
•
|
If
our ratio of earnings to fixed charges, which was 1.56:1 at the end of
2007, were to deteriorate to 1.10:1, GE has committed to contribute
capital to us. GE also guaranteed certain issuances of our subordinated
debt having a face amount of $0.5 billion at December 31, 2007 and
2006.
|
•
|
In
connection with certain subordinated debentures for which GECC receives
equity credit by rating agencies, GE has agreed to forego dividends,
distributions or other payments from GECC during events of default or
interest extensions under such subordinated debentures. There were $8.1
billion of such debentures outstanding at December 31,
2007.
|
•
|
If
our short-term credit rating or certain consolidated entities discussed
further in note 19 were to be reduced below A-1/P-1, we would be required
to provide substitute liquidity for those entities or provide funds to
retire the outstanding commercial paper. The maximum net amount that we
would be required to provide in the event of such a downgrade is
determined by contract, and amounted to $7.2 billion at January 1,
2008.
|
•
|
One
group of consolidated entities holds high quality investment securities
funded by the issuance of GICs. If our long-term credit rating were to
fall below AA-/Aa3 or our short-term credit rating were to fall below
A-1+/P-1, we could be required to provide up to $6.2 billion of capital to
such entities.
|
·
|
Transaction
costs will generally be expensed. Certain such costs are presently treated
as costs of the acquisition.
|
·
|
In-process
research and development (IPR&D) will be accounted for as an asset,
with the cost recognized as the research and development is realized or
abandoned. IPR&D is presently expensed at the time of the
acquisition.
|
·
|
Contingencies,
including contingent consideration, will generally be recorded at fair
value with subsequent adjustments recognized in operations. Contingent
consideration is presently accounted for as an adjustment of purchase
price.
|
·
|
Decreases
in valuation allowances on acquired deferred tax assets will be recognized
in operations. Such changes previously were considered to be subsequent
changes in consideration and were recorded as decreases in
goodwill.
|
•
|
Average
total shareowner’s equity, excluding effects of discontinued
operations
|
•
|
Delinquency
rates on certain financing receivables of the GE Commercial Finance and GE
Money segments for 2007, 2006 and
2005
|
December
31 (In millions)
|
2007
|
2006
|
2005
|
2004
|
2003
|
||||||||||
Average
total shareowner’s equity(b)
|
$
|
58,560
|
$
|
53,769
|
$
|
53,460
|
$
|
49,403
|
$
|
43,954
|
|||||
Less
the effects of
|
|||||||||||||||
Cumulative earnings
from
|
|||||||||||||||
discontinued
operations
|
–
|
–
|
2,725
|
4,131
|
2,788
|
||||||||||
Average net investment in
discontinued
|
|||||||||||||||
operations
|
(158
|
)
|
1,243
|
1,780
|
–
|
–
|
|||||||||
Average
total shareowner’s equity, excluding
|
|||||||||||||||
effects of discontinued
operations(a)
|
$
|
58,718
|
$
|
52,526
|
$
|
48,955
|
$
|
45,272
|
$
|
41,166
|
|||||
(a)
|
Used
for computing return on average shareowner’s equity shown in the Selected
Financial Data section.
|
|
(b)
|
On
an annual basis, calculated using a five-point average.
|
December
31
|
2007
|
2006
|
2005
|
|||
Managed
|
1.21
|
%
|
1.22
|
%
|
1.31
|
%
|
Off-book
|
0.71
|
0.52
|
0.76
|
|||
On-book
|
1.33
|
1.42
|
1.53
|
December
31
|
2007
|
2006
|
2005
|
|||
Managed
|
5.36
|
%
|
5.21
|
%
|
5.34
|
%
|
U.S.
|
5.52
|
4.93
|
5.00
|
|||
Non-U.S.
|
5.30
|
5.32
|
5.47
|
|||
Off–book
|
6.59
|
5.49
|
5.28
|
|||
U.S.
|
6.64
|
5.49
|
5.28
|
|||
Non-U.S.
|
(a
|
)
|
(a
|
)
|
(a
|
)
|
On–book
|
5.20
|
5.19
|
5.35
|
|||
U.S.
|
4.78
|
4.70
|
4.89
|
|||
Non-U.S.
|
5.31
|
5.32
|
5.47
|
(a)
|
Not
meaningful.
|
For
the years ended December 31 (In millions)
|
2007
|
2006
|
2005
|
|||||||
Revenues
|
||||||||||
Revenues
from services (note 3)
|
$
|
66,531
|
$
|
55,373
|
$
|
48,851
|
||||
Sales
of goods
|
718
|
2,384
|
2,528
|
|||||||
Total revenues
|
67,249
|
57,757
|
51,379
|
|||||||
Costs
and expenses
|
||||||||||
Interest
|
22,305
|
17,531
|
13,826
|
|||||||
Operating
and administrative (note 4)
|
18,035
|
16,296
|
15,421
|
|||||||
Cost
of goods sold
|
628
|
2,204
|
2,369
|
|||||||
Investment
contracts, insurance losses and insurance annuity
benefits
|
682
|
641
|
933
|
|||||||
Provision
for losses on financing receivables (note 7)
|
4,603
|
3,066
|
3,262
|
|||||||
Depreciation
and amortization (note 8)
|
8,096
|
6,455
|
5,943
|
|||||||
Minority
interest in net earnings of consolidated affiliates
|
229
|
262
|
155
|
|||||||
Total costs and
expenses
|
54,578
|
46,455
|
41,909
|
|||||||
Earnings
from continuing operations before income taxes
|
12,671
|
11,302
|
9,470
|
|||||||
Provision
for income taxes (note 13)
|
(714
|
)
|
(1,171
|
)
|
(967
|
)
|
||||
Earnings
from continuing operations
|
11,957
|
10,131
|
8,503
|
|||||||
Earnings
(loss) from discontinued operations, net of taxes (note 2)
|
(2,142
|
)
|
255
|
1,423
|
||||||
Net
earnings
|
$
|
9,815
|
$
|
10,386
|
$
|
9,926
|
||||
Statement
of Changes in Shareowner’s Equity
|
||||||||||
(In
millions)
|
2007
|
2006
|
2005
|
|||||||
Changes in shareowner’s
equity (note 15)
|
||||||||||
Balance
at January 1
|
$
|
56,585
|
$
|
50,190
|
$
|
54,038
|
||||
Dividends
and other transactions with shareowner
|
(6,769
|
)
|
(6,231
|
)
|
(11,101
|
)
|
||||
Changes
other than transactions with shareowner
|
||||||||||
Investment securities –
net
|
(506
|
)
|
(263
|
)
|
(230
|
)
|
||||
Currency translation adjustments
– net
|
2,559
|
2,466
|
(2,501
|
)
|
||||||
Cash flow hedges –
net
|
(550
|
)
|
168
|
81
|
||||||
Benefit plans –
net
|
173
|
(12
|
)
|
(23
|
)
|
|||||
Total changes other than
earnings
|
1,676
|
2,359
|
(2,673
|
)
|
||||||
Increases attributable to net
earnings
|
9,815
|
10,386
|
9,926
|
|||||||
Total changes other than
transactions with shareowner
|
11,491
|
12,745
|
7,253
|
|||||||
Cumulative
effect of changes in accounting principles(a)
|
(77
|
)
|
(119
|
)
|
–
|
|||||
Balance
at December 31
|
$
|
61,230
|
$
|
56,585
|
$
|
50,190
|
||||
(a)
|
The
effect of the 2006 accounting change was previously included in the
caption “Benefit plans – net.”
|
See
accompanying notes.
|
At
December 31 (In millions, except share amounts)
|
2007
|
2006
|
||||
Assets
|
||||||
Cash
and equivalents
|
$
|
8,623
|
$
|
9,672
|
||
Investment
securities (note 5)
|
20,740
|
21,325
|
||||
Inventories
|
63
|
54
|
||||
Financing
receivables – net (notes 6 and 7)
|
380,004
|
323,943
|
||||
Other
receivables
|
28,721
|
35,896
|
||||
Property,
plant and equipment – net (note 8)
|
63,692
|
57,908
|
||||
Goodwill
(note 9)
|
25,251
|
22,578
|
||||
Other
intangible assets – net (note 9)
|
4,074
|
2,627
|
||||
Other
assets (note 10)
|
82,515
|
58,543
|
||||
Assets
of discontinued operations (note 2)
|
6,703
|
11,119
|
||||
Total
assets
|
$
|
620,386
|
$
|
543,665
|
||
Liabilities
and equity
|
||||||
Short-term
borrowings (note 11)
|
$
|
186,770
|
$
|
168,894
|
||
Accounts
payable
|
14,575
|
15,436
|
||||
Long-term
borrowings (note 11)
|
309,233
|
256,807
|
||||
Investment
contracts, insurance liabilities and insurance annuity benefits (note
12)
|
12,311
|
12,418
|
||||
Other
liabilities
|
25,683
|
20,242
|
||||
Deferred
income taxes (note 13)
|
7,637
|
11,080
|
||||
Liabilities
of discontinued operations (note 2)
|
1,340
|
201
|
||||
Total
liabilities
|
557,549
|
485,078
|
||||
Minority
interest in equity of consolidated affiliates (note 14)
|
1,607
|
2,002
|
||||
Common
stock, $14 par value (4,166,000 shares authorized at
December 31, 2007 and 2006, and
3,985,403 shares issued
and outstanding at December 31,
2007 and 2006)
|
56
|
56
|
||||
Accumulated
gains (losses) – net
|
||||||
Investment
securities
|
(25
|
)
|
481
|
|||
Currency translation
adjustments
|
7,368
|
4,809
|
||||
Cash flow hedges
|
(749
|
)
|
(199
|
)
|
||
Benefit plans
|
(105
|
)
|
(278
|
)
|
||
Additional
paid-in capital
|
14,172
|
14,088
|
||||
Retained
earnings
|
40,513
|
37,628
|
||||
Total shareowner’s equity (note
15)
|
61,230
|
56,585
|
||||
Total
liabilities and equity
|
$
|
620,386
|
$
|
543,665
|
||
The
sum of accumulated gains (losses) on investment securities, currency
translation adjustments, cash flow hedges and benefit plans constitutes
“Accumulated nonowner changes other than earnings,” as shown in note 15,
and was $6,489 million and $4,813 million at December 31, 2007 and 2006,
respectively.
|
|
See
accompanying notes.
|
For
the years ended December 31 (In millions)
|
2007
|
2006
|
2005
|
||||||
Cash
flows – operating activities
|
|||||||||
Net
earnings
|
$
|
9,815
|
$
|
10,386
|
$
|
9,926
|
|||
Loss
(earnings) from discontinued operations
|
2,142
|
(255
|
)
|
(1,423
|
)
|
||||
Adjustments
to reconcile net earnings to cash provided
|
|||||||||
from operating
activities
|
|||||||||
Depreciation and amortization
of property, plant and equipment
|
8,096
|
6,455
|
5,943
|
||||||
Deferred income
taxes
|
(313
|
)
|
590
|
(1,088
|
)
|
||||
Decrease (increase) in
inventories
|
2
|
(23
|
)
|
30
|
|||||
Increase (decrease) in accounts
payable
|
(351
|
)
|
1,016
|
(1,981
|
)
|
||||
Provision for losses on
financing receivables
|
4,603
|
3,066
|
3,262
|
||||||
All other operating activities
(note 16)
|
(235
|
)
|
410
|
2,270
|
|||||
Cash
from operating activities – continuing operations
|
23,759
|
21,645
|
16,939
|
||||||
Cash
from (used for) operating activities – discontinued
operations
|
3,897
|
(2,115
|
)
|
5,429
|
|||||
Cash
from operating activities
|
27,656
|
19,530
|
22,368
|
||||||
Cash
flows – investing activities
|
|||||||||
Additions
to property, plant and equipment
|
(15,006
|
)
|
(12,910
|
)
|
(11,176
|
)
|
|||
Dispositions
of property, plant and equipment
|
8,322
|
6,072
|
5,511
|
||||||
Net
increase in financing receivables (note 16)
|
(44,567
|
)
|
(38,679
|
)
|
(16,590
|
)
|
|||
Proceeds
from sales of discontinued operations
|
117
|
3,663
|
7,281
|
||||||
Proceeds
from principal business dispositions
|
1,699
|
386
|
209
|
||||||
Payments
for principal businesses purchased
|
(7,570
|
)
|
(7,299
|
)
|
(7,167
|
)
|
|||
All
other investing activities (note 16)
|
(2,230
|
)
|
(14,193
|
)
|
1,870
|
||||
Cash
used for investing activities – continuing operations
|
(59,235
|
)
|
(62,960
|
)
|
(20,062
|
)
|
|||
Cash
from (used for) investing activities – discontinued
operations
|
(3,784
|
)
|
1,953
|
(6,972
|
)
|
||||
Cash
used for investing activities
|
(63,019
|
)
|
(61,007
|
)
|
(27,034
|
)
|
|||
Cash
flows – financing activities
|
|||||||||
Net
increase (decrease) in borrowings (maturities of 90 days or
less)
|
2,146
|
10,025
|
(5,082
|
)
|
|||||
Newly
issued debt (maturities longer than 90 days) (note 16)
|
92,046
|
90,038
|
65,869
|
||||||
Repayments
and other reductions (maturities longer
|
|||||||||
than 90 days) (note
16)
|
(52,662
|
)
|
(48,923
|
)
|
(48,837
|
)
|
|||
Dividends
paid to shareowner
|
(6,695
|
)
|
(7,904
|
)
|
(8,614
|
)
|
|||
All
other financing activities (note 16)
|
(408
|
)
|
1,918
|
(2,554
|
)
|
||||
Cash
from financing activities – continuing operations
|
34,427
|
45,154
|
782
|
||||||
Cash
from (used for) financing activities – discontinued
operations
|
(6
|
)
|
(10
|
)
|
226
|
||||
Cash
from financing activities
|
34,421
|
45,144
|
1,008
|
||||||
Increase
(decrease) in cash and equivalents during year
|
(942
|
)
|
3,667
|
(3,658
|
)
|
||||
Cash
and equivalents at beginning of year
|
9,849
|
6,182
|
9,840
|
||||||
Cash
and equivalents at end of year
|
8,907
|
9,849
|
6,182
|
||||||
Less
cash and equivalents of discontinued operations at end of
year
|
284
|
177
|
349
|
||||||
Cash
and equivalents of continuing operations at end of year
|
$
|
8,623
|
$
|
9,672
|
$
|
5,833
|
|||
Supplemental
disclosure of cash flows information
|
|||||||||
Cash
paid during the year for interest
|
$
|
(21,419
|
)
|
$
|
(14,879
|
)
|
$
|
(15,056
|
)
|
Cash
recovered (paid) during the year for income taxes
|
1,158
|
(886
|
)
|
(2,459
|
)
|
||||
See
accompanying notes.
|
•
|
Consolidated This
represents the adding together of all affiliates, giving effect to the
elimination of transactions between
affiliates.
|
•
|
Operating Segments These
comprise our three businesses, focused on the broad markets they serve: GE
Commercial Finance, GE Money, and GE Infrastructure. For segment reporting
purposes, certain financial services businesses including Aviation
Financial Services, Energy Financial Services and Transportation Finance
are reported in the GE Infrastructure segment because GE Infrastructure
actively manages such businesses and reports their results for internal
performance measurement purposes. During the fourth quarter of 2007, we
transferred the Equipment Services business from the GE Industrial segment
to the GE Commercial Finance segment, where a portion of the business is
reported in Capital Solutions. Prior period information has been
reclassified to be consistent with the current
organization.
|